06 May Determining if Your Legal Practice is Eligible for Coronavirus Relief and How to Apply
We have been incredibly fortunate at Joorney to be able to withstand these difficult times. Now, more than ever, we appreciate how valuable and vital our connections are. We care for our immigration attorney partners and wanted to compile info and resources to ensure you know your options should your business be experiencing any slow down or interruptions.
Depending on the number of employees and structure of your practice, there were limited options available prior to the passage of the CARES Act. However now, whether your legal practice is a sole-proprietorship, partnership, LLP, LLC, or corporation, there are options available to you. Many of these options apply regardless of whether you have employees on payroll or not.
Automatic Financial Assistance
Requiring No Action:
Economic Impact Payment – If, as an individual, you or your employees make less than $75,000/year and filed a tax return for 2018 or 2019, you/they are eligible for a stimulus payment of $1,200 ($2,400 for married couples filing jointly) plus $500 per dependent child. Distribution of these payments began in mid-April. If you or your staff are eligible and have not yet received this payment or need to provide your direct deposit information, you can do that here.
Loan Forgiveness on Qualified SBA Loans – If your legal practice already has a current SBA 7(a), 504, or microloan in good standing, six months of payments will be fully covered. Payments on new loans in these categories due through September 27, 2020 will also be covered. You may want to look into these programs if specific CARES Act loans and programs aren’t available or applicable to your practice. If you happen to already have an Economic Injury Disaster Loan (EIDL) relating to a situation other than COVID-19, this has been deferred for six months.
Financial Options for
Business Owners & Employees:
Unemployment Insurance (UI) – UI benefits used to exclude independent contractors, sole proprietors, and other types of entrepreneurs and business owners. However, under the CARES Act, these benefits have now been extended to include nearly everyone who is unable to work due to COVID-19. Especially if you are the sole practitioner in your legal firm, you should consider applying if you have unfortunately had to temporarily close your practice. If you have employees, regardless of if they are on payroll or not, they are likely also able to collect these benefits. If eligible, benefits are based on regular income and your state’s maximum payment. In addition to that figure, recipients will temporarily receive $600/wk. from April 5th through July 31st. Search your state’s UI or Pandemic UI sites for further information to learn how you and/or your employees can apply.
Financial Programs for All Business Types:
Payment Protection Program (PPP) – This program, intended to incentivize companies to keep on or quickly rehire employees laid off due to coronavirus, is available to you whether you operate as a solo practitioner, have a firm with up to 500 employees, or fall anywhere in between. Although the initial funding for this program quickly ran out, an additional $310 billion became available April 27th. If you are considering this loan, you should apply as soon as possible as it is expected funds will quickly be exhausted again.
The PPP loan will be forgiven if 75% of the amount is spent on salaries and the remainder is spent on other approved expenses such as mortgage interest, rent or utilities. You must apply through your lender but, you can learn more about the program here.
Economic Injury Disaster Loan (EIDL)* – This program existed prior to COVID-19. It is meant to provide relief loans with low interest, repayment terms up to 30 years, and deferred payments up to a year to small businesses impacted by a declared disaster such as coronavirus. More information is available through the SBA’s website. These loans are available for sole proprietors or any other type of legal entity, whether your firm has employees or not.
Economic Injury Disaster Loan (EIDL) Grant* – This program is also known as the EIDL Advance. Upon applying for an EIDL, you may be eligible for an immediate advance of up to $10,000. This portion will not need to be repaid. Regardless how your firm is set up or if you have employees, this may be a viable option for funding that does not need to be repaid. Learn more here
*Note: As of April 15th, the EIDL and EIDL Advance programs are not accepting additional applications due to reaching the limit of current federal funding. However, continue to check the respective sites often. Additional measures may be passed that would provide additional funding to these specific programs.
SBA Express Bridge Loan – If your firm has an existing relationship with an SBA Express Lender, you can apply for a bridge loan. This loan of up to $25,000 will either be issued as an immediate term loan or to rush funds if you are awaiting a response on an EIDL application. If you fall into the latter category, this loan will be repaid by the approved amount of the EIDL. You can find more information or, if you’re ready to apply, contact your selected lender to see if they are an SBA Express Lender.
Understanding the exact requirements and benefits of each program can be a bit overwhelming. If you need assistance figuring out which program(s) apply to your specific firm’s circumstances or which option you should apply for first, the CARES Act also designated funding to support SBA partners in providing free counseling. Contact your local SBA partner for further guidance.
In addition to the federal CARES Act, many cities, states, and specific industries are implementing their own programs to help businesses and individuals, regardless of employment status, business structure, or number of employees. It is advantageous to pay attention to the news and conduct regular searches of other relevant geographic areas, professional services, or the specific industries your firm services. Combined, these opportunities for aid can help your business recover quicker and easier and possibly with less interruption.